US Automakers Strongly Oppose Proposal to Increase Fuel Efficiency Regulations

    Group Criticizes Biden Administration Proposal to Hike Fuel Efficiency Requirements

    A group representing major automakers, including General Motors, Toyota, and Volkswagen, has strongly criticized the Biden administration’s proposal to significantly increase fuel efficiency requirements. The Alliance for Automotive Innovation argues that the National Highway Traffic Safety Administration’s (NHTSA) Corporate Average Fuel Economy (CAFE) proposal is unreasonable and calls for substantial revisions.

    According to the industry group, the plan would result in an average vehicle price increase of $3,000 by 2032 due to penalties imposed on automakers for non-compliance. The group believes that this figure is excessive and highlights that there would be no environmental or fuel savings benefits to offset the added costs for American consumers.

    The NHTSA had proposed raising requirements by 2% per year for passenger cars and 4% per year for pickup trucks and SUVs from 2027 through 2032, aiming to achieve a fleet-wide average fuel efficiency of 58 miles per gallon.

    In a separate statement, the American Automotive Policy Council, which represents the Detroit Three automakers, urged the NHTSA to cut its proposed fuel economy increases in half to 2% annually for trucks. This request emphasizes that the current proposal would disproportionately impact the truck fleet.

    The group pointed out that trucks constitute approximately 83% of the vehicles produced by Ford, General Motors, and Chrysler parent company Stellantis.

    The White House and the NHTSA have yet to respond to these criticisms.

    The Alliance for Automotive Innovation has previously estimated that automakers would face over $14 billion in non-compliance penalties between 2027 and 2032. Individual automakers, such as GM, Stellantis, and Ford, have also warned that the fines would amount to billions of dollars for each company.

    In addition, automakers have expressed concerns about the Energy Department’s proposed changes to how it calculates the petroleum-equivalent fuel economy rating for electric vehicles (EVs) in the NHTSA’s CAFE program. The industry argues that these changes would devalue the fuel economy of EVs by 72%.

    General Motors has stated that it could support the NHTSA’s proposal if the Energy Department withdraws its petroleum-equivalent proposal. Meanwhile, Volkswagen, which could face over $800 million in CAFE fines through 2032, has described the NHTSA’s proposal as arbitrary, capricious, and an abuse of the agency’s discretion.

    Subaru has shared concerns that even if the NHTSA proposal is feasible, current proposals do not allow for sufficient fleet ramp-up of electric vehicles.

    Both automakers and the United Auto Workers union have previously criticized the parallel rules proposed by the Environmental Protection Agency, arguing that they are unattainable and should be significantly eased.

    The Biden administration’s proposed fuel efficiency requirements have drawn severe criticisms from major automakers, who argue that the plan would burden consumers with increased costs while providing little environmental or fuel savings benefits. The industry group representing GM, Toyota, Volkswagen, and others in the automotive sector has requested significant revisions to the NHTSA’s proposal, emphasizing that the penalties for non-compliance would result in higher vehicle prices. As the debate continues, the White House and NHTSA have yet to respond to these concerns.

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